The question was written by a teacher who isn't quite clear
on the concepts. Both the question and the list of answers
are misleading. If you're serious about learning this subject,
you're better off ignoring this question, or at least not working
too hard on it.
... The Doppler shift is an APPARENT shift in the wavelength and
frequency of the waves that come from a source of oscillations.
... The shift is measured by the observer. He sees and hears
different frequency and wavelength, compared to what's actually
coming out of the source.
... The shift can be the result of EITHER the source OR the observer.
Any time the distance between them is changing, the shift occurs.
It doesn't matter which one is moving.